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Mediator appointed over unfair contracts legal dispute

A mediator has been appointed to avoid a bitter legal dispute over alleged unfair contracts in the regional timber industry. Source: ABC Rural News

Timber processor Hurford’s Hardwood employs more than 260 staff, including 100 on the north coast of New South Wales.

Hurford director Andrew Hurford said contracts between its competitor, Boral, and the NSW Government-owned Forestry Corporation gave Boral an unfair advantage over other timber processors.

Boral’s contract secures its supply of rare Australian hardwood to 2027, five years longer than other mills, and guarantees specific quantities of high-value varieties including blackbutt and spotted gum.

The details of Boral’s contracts were not made public initially, but through freedom of information requests, other timber processors have found out specific details, which they say leave them at a significant disadvantage.

“The Government has given a more favourable agreement to Boral timber, and what that means is that they have contractually committed to supply certain volumes of all the high-value species to Boral, where they haven’t made the same commitment to the rest of the industry,” Mr Hurford said.

The original wood supply agreements were negotiated under the NSW Carr government in 2003 and 2004. But in 2014, Forestry Corporation and the Government agreed with Boral to a major variation in its agreement, including an $8.5 million payout to buy back some of its sawlog quota.

“We are calling on the minister to level that playing field so the rest of the industry are in the same position as Boral to be able to compete,” Mr Hurford said.

Industry lobby group Timber New South Wales said the agreement just made it a better deal for Boral at the expense of any of the smaller regional mills.

Forestry Minister Paul Toole said the wood supply agreements were a legacy issue.

“This Government is committed to building a stronger, more competitive and ecologically sustainable forestry industry.”

Boral declined to comment, but referred the ABC to its statement to the Australian Stock Exchange that the $8.5m compensation received from the New South Wales Government was to help offset the lower volumes of wood it would receive, and to ensure greater certainty for supply of specific hardwood timber species.